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Home Bias, an Academic Puzzle

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  • G. Andrew Karolyi

Abstract

Only 16% (23%) of all empirical studies published in the top four (fourteen) Finance journals examine non-US markets, a fraction that is well below measures reflecting their economic importance. This “home bias” measure fluctuates across years with a weakly declining trend. There is also a “foreign bias” in which some non-US countries are more frequently the subject of published papers than others. I am able to explain only a small fraction of either the home-bias or the foreign-bias puzzles. Surprisingly, there are on average 2.01 higher annual cumulative citations per non-US paper published relative to cohort-matched US-focused papers.

Suggested Citation

  • G. Andrew Karolyi, 2016. "Home Bias, an Academic Puzzle," Review of Finance, European Finance Association, vol. 20(6), pages 2049-2078.
    • Handle: RePEc:oup:revfin:v:20:y:2016:i:6:p:2049-2078.
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    References listed on IDEAS

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    1. G.M. Constantinides & M. Harris & R. M. Stulz (ed.), 2003. "Handbook of the Economics of Finance," Handbook of the Economics of Finance, Elsevier, edition 1, volume 1, number 1.
    2. David W. Johnston & Marco Piatti & Benno Torgler, 2013. "Citation success over time: theory or empirics?," Scientometrics, Springer;Akadémiai Kiadó, vol. 95(3), pages 1023-1029, June.
    3. Baxter, Marianne & Jermann, Urban J, 1997. "The International Diversification Puzzle Is Worse Than You Think," American Economic Review, American Economic Association, vol. 87(1), pages 170-180, March.
    4. G.M. Constantinides & M. Harris & R. M. Stulz (ed.), 2003. "Handbook of the Economics of Finance," Handbook of the Economics of Finance, Elsevier, edition 1, volume 1, number 2.
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    More about this item

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics

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